Judge backs Eaton power management giant in row over US taxman’s demand for surrender of foreign staff evaluations, including Irish

Judge Jonathan Greenberg found the summonsed evaluations had not been 'shown to be relevant to a legitimate purpose'. Photo: Getty Images

Sean Pollock

Eaton, the Irish-headquartered multinational power management giant, shouldn’t have to surrender confidential performance evaluations of its foreign employees to the US government as part of a tax investigation into its intellectual property sales and subsequent royalty payments to foreign affiliates, a US judge has advised.

Last week, the Sunday Independent reported that Eaton had been embroiled in a row with America’s tax collector the IRS and the US government over their demands to access performance evaluations of its foreign staff, including 19 staff in Ireland.

The company filed a court complaint seeking to stop a demand from the IRS and agreed to stay deadlines on that complaint ahead of an imminent decision in a separate but related case taken against it by the US government.

A US court has denied the US government’s petition to enforce the IRS summons on Eaton

In June, the US government filed a court petition seeking to force Eaton to hand over the performance evaluations. The case was referred for a report and recommendation.

In the report and recommendation, published last week by US Magistrate Judge Jonathan Greenberg, it was found the summonsed evaluations had not been “shown to be relevant to a legitimate purpose”. It therefore denied the US government’s petition to enforce the IRS summons.

The report also examined Eaton’s claims it could end up violating GDPR by complying with the IRS request. The judge largely sided with Eaton, citing the US government not showing the relevance of the records and a failure to offer an explanation as to why alternatives offered by Eaton, including interviews with relevant staff, were inadequate.

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